Correlation Between Yindu Kitchen and Chengdu Kanghua
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By analyzing existing cross correlation between Yindu Kitchen Equipment and Chengdu Kanghua Biological, you can compare the effects of market volatilities on Yindu Kitchen and Chengdu Kanghua and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Yindu Kitchen with a short position of Chengdu Kanghua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yindu Kitchen and Chengdu Kanghua.
Diversification Opportunities for Yindu Kitchen and Chengdu Kanghua
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yindu and Chengdu is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Yindu Kitchen Equipment and Chengdu Kanghua Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Kanghua Biol and Yindu Kitchen is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Yindu Kitchen Equipment are associated (or correlated) with Chengdu Kanghua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Kanghua Biol has no effect on the direction of Yindu Kitchen i.e., Yindu Kitchen and Chengdu Kanghua go up and down completely randomly.
Pair Corralation between Yindu Kitchen and Chengdu Kanghua
Assuming the 90 days trading horizon Yindu Kitchen Equipment is expected to under-perform the Chengdu Kanghua. But the stock apears to be less risky and, when comparing its historical volatility, Yindu Kitchen Equipment is 1.98 times less risky than Chengdu Kanghua. The stock trades about -0.02 of its potential returns per unit of risk. The Chengdu Kanghua Biological is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,013 in Chengdu Kanghua Biological on September 4, 2024 and sell it today you would earn a total of 731.00 from holding Chengdu Kanghua Biological or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yindu Kitchen Equipment vs. Chengdu Kanghua Biological
Performance |
| Timeline |
| Yindu Kitchen Equipment |
| Chengdu Kanghua Biol |
Yindu Kitchen and Chengdu Kanghua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yindu Kitchen and Chengdu Kanghua
The main advantage of trading using opposite Yindu Kitchen and Chengdu Kanghua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yindu Kitchen position performs unexpectedly, Chengdu Kanghua can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chengdu Kanghua will offset losses from the drop in Chengdu Kanghua's long position.| Yindu Kitchen vs. Chengdu Kanghua Biological | Yindu Kitchen vs. Beijing Wantai Biological | Yindu Kitchen vs. Suzhou Novoprotein Scientific | Yindu Kitchen vs. Aluminum Corp of |
| Chengdu Kanghua vs. Sichuan Fulin Transportation | Chengdu Kanghua vs. Dazhong Transportation Group | Chengdu Kanghua vs. Sportsoul Co Ltd | Chengdu Kanghua vs. Sichuan Teway Food |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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